The President of the Financial Markets Authority admits that limits have been reached – new instruments are intended to change that.
Her job is to supervise the Swiss financial market – and therefore also the big banks: Marlene Amstad, President of the Swiss Financial Market Supervisory Authority (Finma). After the demise of CS, the authority came under criticism: Why couldn’t it prevent the big bank from going under?
SRF News: Finma says it did everything it could to prevent the CS debacle. But are you not self-critical enough? A viewer writes to us that the authority is partly to blame for the downfall of Credit Suisse.
Marlene Amstad: It was a very dramatic event and I understand that it is being viewed critically. With the CS we really did reach the limits of our capabilities. With new instruments we hope that we can intervene earlier in the future and also ensure that the likelihood of a weekend like the one we experienced in March 2023 decreases.
As for self-criticism: At the end of last year, when we presented our lessons from the CS situation, we already identified various measures to make it clear that we too are making even greater use of discretion.
You had already secretly prepared the restructuring of Credit Suisse in the summer of 2022. Shouldn’t you have initiated the restructuring the following autumn?
Restructuring is very drastic. Credit Suisse is not part of the financial market supervisory authority. Such drastic cuts are clearly regulated by law. CS could therefore not simply be restructured when the share price is low.
What was also somewhat overlooked was that we had already “practiced” the restructuring in November 2022 – using real-time data from Credit Suisse. We did this together with other foreign regulators, especially in the USA and Great Britain.
As we know, things turned out differently.
We had various options on the table that weekend in March 2023 and, together with the other authorities, we chose the option with the lowest risks that tackled the root of the problem, namely addressing CS’s trust problem.
Finma only employs 560 people. Luxembourg has twice as many. Are you too weak to be effective?
No. We are like the police in the system. There isn’t a policeman sitting next to every driver. In addition, we use auditing companies as an extension of our system, a peculiarity of the Swiss financial market.
Do you now need more staff to supervise UBS? At the height of the crisis, only six people were said to be responsible for CS.
That was just the core team. There were many more people responsible for the bank. Now we have merged teams and around 60 people are overseeing UBS. We grow when we have to take on new tasks. UBS is a concentration of risk in the financial center and that is one of the reasons why we will grow appropriately.
The interview was conducted by Reto Lipp.
Eco Talk, June 17, 2024, 10:25 p.m. ; stiih